With no debt, a firm has a cost of equity of 15%. The firm can borrow at 9% and pays a 30% corporate tax rate. If the firm converts to 40% debt, what will be its cost of equity? 11.5% 12.6% 16.7% 17.8% 19.0% Under the Modigliani and Miller (MM) assumptions of perfect capital markets and no taxes, which of the following changes with changes in capital structure? firm value return on equity weighted-average cost of capital return on assets none of the above is affected by changes in capital structure